Kospi drops more than 1% as chip and bio stocks struggle

Finance

Kospi drops more than 1% as chip and bio stocks struggle

Published: 29 Aug. 2024, 16:49 Updated: 29 Aug. 2024, 17:42

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,662.28 points on Thursday, down 1.02 percent, or 27.55 points, from the previous trading session. [AP]

Shares retreated more than 1 percent Thursday, led by chipmakers after an underwhelming earnings result by AI chipmaker Nvidia.

The benchmark Kospi slipped 27.55 points, or 1.02 percent, to close at 2,662.28.

Trade volume was moderate at 284.7 million shares worth 11.3 trillion won ($8.47 billion), with losers outnumbering winners 590 to 280.

Institutions and foreign investors sold a net 68.6 billion won worth of shares, while individuals bought a net 62.7 billion won.

Overnight in the United States, the Dow Jones Industrial Average fell 0.39 percent, with the S&P 500 losing 0.6 percent. The tech-heavy Nasdaq composite slipped 1.12 percent as well.

Wall Street lost ground as Nvidia's closely followed second-quarter earnings result failed to impress investors, despite having beaten market expectations.

Despite the market losses, observers advised investors to maintain a level-headed approach in reading market developments.

"What we need to focus on at this point is that although market expectations have risen significantly, the failure to meet these expectations does not indicate any damage to the earnings trend or the AI cycle," said Han Ji-young, an analyst at Kiwoom Securities. "There is also the possibility that the market sentiment could improve depending on changing interpretations of the current situation among market players."

In Seoul, chip stocks took heavy beatings. Samsung Electronics fell 3.14 percent to 74,000 won and SK hynix plunged 5.35 percent to 169,700 won.

Bio shares also fell after gains in the past few sessions. Samsung Biologics shed 3.53 percent to close at 956,000 won, and Celltrion slipped 1.24 percent to 199,000 won.

In contrast, battery and energy shares advanced. Battery maker LG Energy Solution surged 6.11 percent to 391,000 won, and refiner SK Innovation rose 1.03 percent to 107,900 won.

The local currency was trading at 1,333.2 won against the dollar, down 5.8 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 2.0 basis points to 2.941 percent, and the return on the benchmark 10-year government bond gained 2.3 basis points to 3.078 percent.

BY YOON SEUNG-JIN, YONHAP [yoon.seungjin@joongang.co.kr]